Monday, April 4, 2016

Some Background On Mossack Fonseca, The Law Firm At The Heart Of The Panama Papers

As noted in our introduction to the Panama Papers, one of the journalistic partners involved in the analysis of the stolen-and-then-leaked documents is the Organized Crime and Corruption Reporting Project.

I happened to be at the website of the OCCRP yesterday looking for something completely unrelated to the biggest story of the week, one of their Corruption Person of the Year (not the honor it might first appear) awardees, and saw this:

Panamanian Law Firm Is Gatekeeper To Vast Flow of Murky Offshore Secrets
Mossack Fonseca & Co. had a problem in Vegas.

Legal papers filed in U.S. District Court in Las Vegas claimed that the Panama-based law firm had created 123 companies in Nevada that had been used by a crony of Argentina’s former president to steal millions of dollars from government contracts. A subpoena demanded that Mossack Fonseca turn over details about any money that had flowed through the Nevada companies.

Mossack Fonesca didn’t want to provide this information. For a firm that specializes in setting up hard-to-trace offshore companies for clients around the world, confidentiality is a must.

The law firm tried to block the subpoena by denying that its Las Vegas operations, run by a company called M.F. Corporate Services (Nevada) Limited, were part of the Mossack Fonseca group.
The firm’s Panama-based co-founder, Jürgen Mossack, testified under oath that “MF Nevada and Mossack Fonseca do not have a parent-subsidiary relationship nor does Mossack Fonseca control the internal affairs or daily operations of MF Nevada’s business.”

But secret records obtained by the International Consortium of Investigative Journalists (ICIJ), the German newspaper Süddeutsche Zeitung and more than 100 other media partners raise new doubts over that sworn testimony.

Not only do they show that the Nevada subsidiary was wholly owned by Mossack Fonseca but that, behind the scenes, the firm took steps to wipe potentially damaging records from phones and computers to keep details of their clients from the United States justice system.

One email from 2014, for instance, instructs that any link between Mossack Fonseca’s central computing system in Panama and the Nevada office “has to be obscure to the investigators.” Other emails report that IT operatives working via remote control from Panama “tried to clean the logs of the PC’s in the Nevada office” and planned to run a “remote session to eliminate the traces of direct access to our CIS” — the firm’s computer information system.

The documents even show that a firm employee traveled from Panama to Vegas to whisk paper documents out of the country. “When Andrés came to Nevada he cleaned up everything and brought all documents to Panama,” a Sept. 24, 2014 email said....MUCH MORE
Being a bit slow on the uptake, it took a half-hour before I asked myself  "Holy crap, have we ever done business with these guys?"
The answer is no but digging around the electronic file cabinets turned up a December, 2014 post on the blog that may be of interest to some of our readers:

The Law Firm That Supplies Shell Companies To Oligarchs, Money Launderers, and Dictators 
One purpose of a so-called shell company is that the money put in it can't be traced to its owner. Say, for example, you're a dictator who wants to finance terrorism, take a bribe, or pilfer your nation's treasury. A shell company is a bogus entity that allows you to hold and move cash under a corporate name without international law enforcement or tax authorities knowing it's yours. Once the money is disguised as the assets of this enterprise—which would typically be set up by a trusted lawyer or crony in an offshore secrecy haven to further obscure ownership—you can spend it or use it for new nefarious purposes. This is the very definition of money laundering—taking dirty money and making it clean—and shell companies make it possible. They're "getaway vehicles," says former US Customs investigator Keith Prager, "for bank robbers."...MORE
"About the Panama Papers"--Süddeutsche Zeitung
The Kremlin's Pre-Emptive Denial Of The Putin Corruption Detailed In The Panama Papers